Court Holds Small Business Administration and Farm Service Agency Must Consult on Loan Guarantees
Posted in Court Decisions

A federal district court in Arkansas recently issued a decision clarifying that the obligation to consult under section 7(a)(2) of the Endangered Species Act (ESA) extends to the Small Business Administration and the Farm Service Agency when they provide loan guarantees to farmers.  The case, Buffalo River Watershed Alliance v. U.S. Dept. of Agriculture, Case No. 13-450 (E.D. Ark. Dec. 2, 2014), involves a concentrated animal feeding operation in Arkansas that obtained loan guarantees from the Small Business Administration and the Farm Service Agency.  The Farm Service Agency, pursuant to the National Environmental Policy Act (NEPA), completed an environmental assessment and issued a Finding of No Significant Impact with respect to its proposed action to provide a loan guarantee.  In contrast, the Small Business Administration determined it had no obligation under NEPA.  Neither agency obtained a biological opinion from the U.S. Fish and Wildlife Service regarding its actions, though it apparently is undisputed that the federally listed gray bat occupies the area.  In holding that both the Small Business Administration and Farm Service Agency were required to consult and had failed to so in contravention of the ESA, the Court explained:

The Agencies argue that their guaranties were not actions within reach of the Endangered Species Act. This argument ... understates the role of the guaranties.

The court provided a one year deadline for compliance and consultation with the U.S. Fish and Wildlife Service.

  • Paul S. Weiland

    Paul Weiland is Assistant Managing Partner and a member of the Environment & Land Use Group. He has represented clients – including public agencies, publicly regulated utilities, corporations, trade associations and ...

Nossaman’s Endangered Species Law & Policy blog focuses on news, events, and policies affecting endangered species issues in California and throughout the United States. Topics include listing and critical habitat decisions, conservation and recovery planning, inter-agency consultation, and related developments in law, policy, and science. We also inform readers about regulatory and legislative developments, as well as key court decisions.

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